Muslim separatist rebels in the Philippines have resorted to an unfamiliar weapon - international diplomacy - to avert war in the south.

The military and the presidential palace had given the 10,000-member Moro Islamic Liberation Front (MILF) a strongly worded ultimatum to hand over those who killed and mutilated 14 marines in an ambush on the island province of Basilan on July 10.

The military deployed 2,000 men for battle, with President Gloria Macapagal-Arroyo contributing 65 of her presidential guards. But after the deadline lapsed on Sunday, security officials backed down and announced an indefinite extension to make way for a Malaysian-led probe.

The fact-finding team arrived in Basilan yesterday.

Sources gave several explanations for the restraint on both sides.

A source close to MILF said rebel leaders were eager to sign a peace pact because they were angling to win control of the Autonomous Region in Muslim Mindanao, where polls for the governor and legislative assembly are due late next year.

Unknown to the military after it issued the ultimatum, MILF chief Ibrahim Murad not only prepared his men for a counter-attack but also engaged in full-scale diplomacy.

Mr Murad wrote to the embassies of the US, Japan, Malaysia, Brunei, Sweden and Libya and to foreign donors. He urged them to help dissuade the Arroyo government from attacking without first investigating who really beheaded the marines.

Japanese ambassador Ryuichiro Yamazaki wrote to chief government peace negotiator Rodolfo Garcia: 'We are gravely concerned that offensive military operations could derail the ongoing peace talks.'

Shozo Matsuura, who heads the Japan International Co-operation Agency in Manila, yesterday said he planned to write a letter emphasising 'dialogue, not military measures'.

Emerita Dizon, project co-ordinator of the World Bank-led US$51 million Mindanao Trust Fund, urged both sides to 'go back to the negotiating table and discuss ways to resolve the issues'.

Before receiving Mr Murad's letter, ambassador Peter Sutherland wrote to the government peace panel anticipating Canada's dismay 'if an outbreak of hostilities were to delay or impede the ongoing peace talks'.

Mr Garcia also disclosed that US ambassador Kristie Kenney 'talked to somebody in the cabinet, expressing the same concern, and many other countries wish to formalise their expression of concern advocating restraint'.

Amid this barrage from foreign diplomats, the military has maintained a surprising silence after condemning the killings. On July 19 armed forces chief of staff General Hermogenes Esperon quietly replaced the marine commander of troops involved in the ambush.

The military said it was to make way for an impartial probe, but sources close to the rebels claimed the military must have known the rebels did not behead the marines.